PATA predicts boost in Indian outbound

28 February 2007

A strong, consumption-driven economy, a large and
increasingly affluent middle class, and the on-going liberalisation of air transport
will contribute to a 10 per cent annual growth in Indian outbound travellers to Asia
Pacific over the next three years, according to a new report.Titled Total Tourism India, the 280-page report is a comprehensive, independent and
authoritative analysis on India’s tourism sector released by the Pacific Asia Travel
Association (PATA) and Visa International. The report reviews all aspects of
India’s inbound, outbound and domestic tourism flows, and outlines a seven-point
action plan to advance India’s tourism development in achieving the sector’s full
potential.

PATA President & CEO Peter de Jong said, “With India being one of the fastest
growing markets in our region, the eyes of the travel industry are turning to this
country of 1.1 billion residents, and its rapidly expanding middle class.”

The report shows that international outbound trips by resident nationals peaked at
around 8.3 million in 2006. Close to three million arrivals were to Asia Pacific
destinations, making India the region’s fourth largest source market behind China,
Japan and Korea.

This is expected to rise to over 3.6 million in 2007 and then increase by more than
10 percent each year to 2009. The top five destinations by percentage growth to
2009 will be Macau, Papua New Guinea, China, Cambodia and Malaysia. For volume
growth over the same period, the top five will be Singapore, China, Malaysia, Hong
Kong and the USA.

Mr de Jong urges PATA destination members and inbound tour operators to take a
closer look at the myriad opportunities presented by India’s burgeoning outbound
tourism market. “As international travellers, Indians tend to take longer trips and
often in large family groups, have a high repeat visitation to preferred
destinations and an excellent yield,” Mr de Jong said.

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“Indians are among the highest spenders in key destinations around the region such
as Singapore and Hong Kong SAR. And every year, millions more Indians move into an
income bracket where they can afford to travel overseas. In very many ways, India
is a market of incredible opportunity,” Mr de Jong added.

Business travel dominates outbound travel and is expected to continue with strong
growth, stimulated by India’s buoyant economy; leisure travellers are still
significant in volume though they are increasingly more sophisticated and demanding.
Findings from leading surveys show that Mumbai is the leading source of India’s
outbound travellers with a market share of around 33 per cent, followed by Delhi at
26 per cent.

James Murray, executive vice president, South and Southeast Asia, Visa International
Asia Pacific said, “India is a significant pillar to global tourism, both as an
inbound destination and a rich source of visitors to many global destinations.
International visitors to India spent Rs. 60 billion (US$1.4 billion) in India
between July 2005 and June 2006 on their Visa cards, with cardholders from the
European Union emerging as the biggest spenders.”

Mr. Murray added, “This report paints one of the more complete pictures of India as
a tourism industry player, and recognizes its current impact, potential and path for
expansion. Tourist spending globally averages about US$2 billion a day. Nearly
US$4 million of that is by international Visa cardholders contributing to India’s
tourism economy.”

According to Mr. Murray, developing an electronic payment infrastructure has become
increasingly critical to facilitate secure, convenient and easy payment options, for
Indian and global travellers.

“Visa has been working with tourism authorities around the world - and very closely
with PATA - to better understand the international visitor’s mindset. Visa provides
empirical data on cardholder spends through Visa’s processing network that captures
actual Visa transactions by international cardholders, giving a more accurate
picture of spending habits. This enables businesses to plan and offer the kind of
goods and services that appeal more to visitors and boost revenues.”

In 2006, international inbound travel to India peaked at a record 4.4 million
arrivals, driven in large part by the successful re-positioning of the destination
brand through the Incredible India marketing campaign.

The report also confirms that India’s domestic travel market has been booming
steadily over the past 15 years, as Indian states increasingly awaken to the
potential of home-grown tourism to stimulate economic growth and boost employment.

Domestic trips reached an all-time high of 430 million in 2006, up 13 percent on
2005. The average annual growth rate has been more than 10 percent since 2000, with
the boom in low cost carriers bringing travel within the price range of millions of
more households across the sub-continent.——-